The Federal Government risks inflicting significantly higher costs on taxpayers and businesses across the entire Australian economy by making pro union changes to procurement rules and grants worth more than $100 billion.
The changes could squeeze small businesses out of work while recreating the conditions that enabled CFMEU corruption in construction, and spreading those risks across the Australian economy and all sectors.
The BCA is calling on the Government to put a stop to its proposed Secure Australian Jobs Framework.
Business Council Chief Executive Bran Black said the findings of Geoffrey Watson SC’s investigation in Victoria and evidence before the Queensland inquiry were stark warnings about the risks of giving unions greater influence over which businesses secure government work.
“After everything we have seen exposed in construction, it’s madness to see the Federal Government risk the same conditions that enabled CFMEU corruption and higher costs across the rest of the economy.” Mr Black said.
“Geoffrey Watson SC’s investigation in Victoria exposed how influence over enterprise agreements and access to work was exploited through corrupt payments that flowed to organised crime figures, and that members of outlaw motorcycle gangs were installed in union positions on government-funded sites.”
“The Government’s proposed changes risk embedding this rotten approach into industries and businesses right across the Australian economy.”
The proposed rules would favour businesses with union-covered enterprise agreements when awarding government contracts, even where a competitor without a union-covered agreement offers better wages and better value for taxpayers.
“It’s extraordinary that a small business could pay its workers more and offer better value for taxpayers but still be disadvantaged because it doesn’t have a union-covered agreement.”
“Taxpayer projects and contracts should go to businesses offering the best value, not those with the preferred union arrangements.”
The changes are set out in the Government’s draft Secure Australian Jobs Framework and proposed amendments to the Supplier Code of Conduct.
The amendments put a preference for union-covered enterprise agreements into the Supplier Code, making it part of process that the public service must follow.
Mr Black said this could also give unions greater leverage over which businesses secure work throughout supply chains and questioned the Government’s proposed construction exemption.
“The Government claims construction will be excluded, but its proposed amendments to the Supplier Code do not include that exclusion.”
“It also proposes extending this framework to Government grants and other taxpayer-funded programs. This could become a Trojan horse for union favouritism in awarding taxpayers’ money.”
“At a time when productivity is going backwards and Australians are struggling with the cost of living, the last thing we need is higher costs and bigger barriers for all businesses,” Mr Black said.
In 2024–25, the Commonwealth reported approximately $105 billion in procurement contract value and more than $20 billion in grant awards.